Like most people, I too was attracted to the stock markets to make quick money after doing my CA articleship, over 3 decades ago. It wasn't the best time for retail investors as the Bulls and Bears were ruling the market. And I too, as a retail investor, had a roller coaster ride in the early days where I did make money, but then lost it all after the securities scam. It was frustrating but I was not ready to give up on the market yet. There was a lot to learn.
One day, lady luck guided me to an old sub-broker, whose advice worked like golden words and has really helped me in my investment journey over the years, coupled with my own experiences.
I have learnt that two important traits to make money in the stock market are - knowledge & wisdom. Investment is about common sense, but it is not commonly applied to investment decisions. Do not follow tips blindly, but make your own decisions as no one, other than your parents, is interested in making you rich. Greed has no limit. If making money was so easy, everyone would have been rich. You have to work hard and be patient to make money.
Another thing I learnt from experience is that between trading and investing, the latter is an easier way of making money. In trading, stop-loss and discipline is critical, while in investing averaging and patience plays an important role. Also, a trader has to think on his/her feet and should be fast, whereas an investor is like a tortoise – slow and steady.
One more lesson is to be humble and not get carried away by money and fame. It is not wise to go against the market. However, when Batata (low-quality stocks) trade at a premium over Tata (quality stocks), it is time to exit the market.
As I enter my Vanprastha ashram, I have started believing that as an investor my duty is to do good karma. (Invest in good companies run by good managers coming from the conviction of good research) and leave it to the market to reward.
The biggest learning from three decades of participation in the market and of Sensex's journey to 58,000 is that discipline and patience are the biggest differentiators between success and failure on Dalal Street.
Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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